As the Q4 season has ended, several important updates are being released, particularly concerning changes in shareholding patterns. Many videos have already covered the buying and selling activity of promoters and foreign institutional investors (FIIs). Additionally, detailed PDF reports were created highlighting companies where promoters, FIIs, and domestic institutional investors (DIIs) collectively bought or sold shares.
In this article, we focus specifically on promoter share pledging – an essential metric for investors to monitor.
What is Promoter Pledging and Why Does It Matter
Promoter pledging refers to the act of using shares as collateral to raise loans. This doesn’t automatically indicate a negative sign, but consistently increasing pledging levels can raise red flags. There is no fixed threshold for how much pledging is risky. For example, even if pledging is at 20%, it doesn’t necessarily mean the company is in trouble, and 80-90% is undoubtedly dangerous. However, generally speaking, pledging above 20-25% is considered a potential risk, similar to driving a vehicle above 100 km/h—it increases risk even if it doesn’t guarantee an accident.
With that understanding, let’s look at 9 companies where promoter pledging has increased in Q4:
1. Jyoti CNC Automation
Promoter Holding: 62.55%
Promoter pledging has increased from 1.79% in December to 4.11% in March.
Previously, in June, it was 0%, then rose to 1.79%, paused, and then increased again.
Investors may consider studying this company further as a cautionary signal.
2. Anupam Rasayan India
Promoter Holding: 61.18%
Promoter pledging has increased for five consecutive quarters:
9.29% → 10% → 13% → 16% → 19.5%
A continuous increase in pledging could signal financial stress or aggressive expansion funded through loans.
3. Ola EIC
Promoter Holding: Around 36-37%
Pledging started at 0%, increased to 2.98% in December, and rose further to 6.5% in March.
Though the promoter holding remained stable, the increase in pledging needs monitoring.
4. TVS Holdings
Promoter Holding: 74.45%
Pledging dropped after repayment (unpledging) but has again increased to 14.43% in March.
This shows the promoters repaid earlier but have now taken on new debt by pledging shares again.
5. Midplus
Promoter Holding: ~40.39%
Promoter pledging rose from 54.17% in December to 59.39% in March.
This steady increase over recent quarters indicates potential financial stress.
6. Emami Ltd
Promoter Holding: 54%
Pledging trend:
June: 11.23%
Then dropped to 8.15%
Rose again to 9.16%
Now at 13.39%
Fluctuating pledging percentages reflect instability or recurring borrowing.
7. PVR Inox
Promoter Holding: Approximately 27%
Pledging trend:
5.86% → 5.93% → 10.17%
This increase comes at a time when the media and entertainment sector faces competition from OTT platforms and free content on YouTube and other apps.
8. Kalyan Jewellers
Promoter Holding: 62.85%
Pledging history:
Initially 0%, increased to 19.3%, then further rose to 24.89%
The increase raised concerns among investors, with many seeking clarity on when the pledging will be cleared. Management has given statements to address some rumors and allegations.
9. Raymond Lifestyle Ltd
Promoter Holding: 54.68%
Pledging is significantly high:
From around 95%, it has now increased even further to approximately 126% (indicating multiple pledges or reassessment of pledged shares based on falling share prices).
This high level of pledging is especially concerning and deserves close attention.
Final Thoughts
These 9 companies have shown a rising trend in promoter pledging in Q4. While pledging itself isn't inherently bad, increasing levels should prompt investors to analyze the company’s financial health, debt servicing ability, and overall business performance.
Disclaimer:
The information provided in this article is for educational and informational purposes only. It is not intended as investment advice or a recommendation to buy or sell any financial instrument. Readers are advised to conduct their own research or consult a financial advisor before making any investment decisions. The author and publisher are not responsible for any losses or damages arising from the use of this information.
